The European Commission has informed a number of suppliers of smart card chips of its preliminary view that they may have participated in a cartel, in breach of EU antitrust rules. The sending of a statement of objections does not prejudge the outcome of the investigation.

The Commission has concerns that certain chips suppliers may have agreed or coordinated their behaviour in the European Economic Area (EEA) in order to keep prices up. This would breach Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the Agreement on the EEA, which prohibit cartels and restrictive business practices.

The Commission initially agreed to explore the possibility of a settlement with the companies involved but has now discontinued the talks due to lack of progress. The normal antitrust procedure will now run its course.

Commission Vice President in charge of competition policy Joaquín Almunia said: "It is not because settlement talks fail that companies get off the hook. The essence of settlement is to benefit from a quicker, more efficient procedure, and to reach a common understanding on the existence and characteristics of a cartel. If that is not possible, the Commission will not hesitate to revert to the normal procedure and to pursue the suspected infringement".

Background

A statement of objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them. The addressees can examine the documents in the Commission's investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities.

If, after the parties have exercised their rights of defence, the Commission concludes that there is sufficient evidence of an infringement, it can issue a decision prohibiting the conduct and impose a fine of up to 10% of a company's annual worldwide turnover.

In 2008 the Commission established a specific procedure for cartel settlements (see IP/08/1056 and MEMO/08/458). Under a cartel settlement, companies that have been found to have participated in a cartel can benefit from a 10% reduction of the fines that would otherwise be imposed on them.